2018 review, Photo by Jack Hamilton on Unsplash

2018 Review: Reshuffling My Pack

I don’t consider myself to be an active trader. In a normal year, I’ll reinvest some dividends every few months and add some fresh money to my ISA in April or May. That’s usually it.

If I am feeling particularly energetic, I might sell a holding that doesn’t seem to cut the mustard anymore and reinvest the money elsewhere. Then I might need to lie down for a few years to recover!

This year, by comparison, has been a hotbed of activity.

I’ve been reshaping my portfolio recently, trimming some larger positions that had become uncomfortably big and ditching a couple of laggards. In their place, I’ve been swapping in some investments with a more global outlook and others to produce a little more income.

However, when I listed everything I had bought and sold this year, I must admit I was a bit surprised quite how busy I’d been…

Tinkering and tailoring

Here’s a full list of what I bought and sold during 2018:

January

  • Bought BlackRock Smaller Companies with accumulated dividends.
  • Sold a residual holding in Berkshire Hathaway and invested in City of London Investment Trust, JPMorgan Global Growth & Income and Murray International.
  • Continued with a monthly contribution to my pension that was invested in Lindsell Train Global Equity — this ran until October.

February

  • Consolidated a smaller pension plan I had into my SIPP, selling out of Invesco High Income and reinvesting in Fundsmith Equity as part of this process.

April

  • Bought Acorn Income Fund with some fresh ISA money.

May

  • Sold part of my holding in HGCapital (which was getting a little large for my liking) and reinvested the proceeds in Princess Private Equity. Both of these are private equity funds, but I wanted to split up my cash in this sector.

June

  • Sold part of my holding in a small-cap miner I’d held for ages and reinvested the proceeds in HICL Infrastructure.

July

August

  • Invested some surplus cash I had in HICL Infrastructure, Murray International and JPMorgan Global Growth & Income. Zero marks for timing!
  • Invested some accumulated dividends in Acorn Income Fund.

September

October

  • Bought into the Smithson new share offer.
  • Bought into BlackRock Smaller Companies with accumulated dividends.
  • Invested some surplus cash in my pension, buying some Lindsell Train Global and Fundsmith Equity. Buying after that first big dip felt good for a week or two!

November

  • Bought a little bit more Smithson and Henderson Smaller Companies with accumulated dividends.

December

  • Received the tax relief on my earlier pension contribution, which was invested into Lindsell Train Global and Fundsmith Equity.

As I am now unitising my portfolio to track its performance, I can see I added roughly 10% to my main portfolio and 5% to my pension over the course of the year.

In retrospect, my timing when it came to adding that new money later in the year looks horrible. But I usually invest fairly quickly once I have made an allocation decision, so that’s something I’ll just have to live with. And I have had plenty of practice over the years!

I continue to believe attempting to time the market is a fool’s errand though. All else being equal, I think the earlier you can put money to work the better.

More of the same in 2019

There’s still some tinkering to do in 2019 I suspect, although I expect it will turn out to be a much quieter year in terms of overall activity.

I still have an oversized holding in Caledonia Investments that I’d like to trim and reinvest elsewhere. In addition, there’s a US stock that I may switch into investment trusts at some stage.

And I will probably add a little money to Baronsmead Venture Trust when its latest fundraising offer opens in the next week or so.

I’ll continue to reinvest dividends when I can, too.

Overall, I’d say I feel a little happier with how my portfolio looks now compared to the start of 2018.

Running the numbers

For a while, I have tracked my main portfolio and pension separately. The latter has traditionally been the less active of the two when it came to investment decisions, so I wanted to see how they compared.

I’ve recreated some performance statistics going back as far as 2010, but they have been more crudely calculated than the unitised method I now use.

YearPortfolioPensionFT A/SGlobal
201049.1%14.5%13.4%
2011-20.7%-1.0%-3.5%
201211.6%12.5%12.3%
2013-4.2%23.8%20.8%21.4%
201411.8%6.4%1.2%11.5%
20154.3%6.2%1.0%2.6%
201626.3%8.9%16.8%29.9%
201714.3%13.6%13.1%13.2%
2018-2.1%6.3%-9.5%-4.7%

Note: I’ve used the Vanguard All-World ETF to reflect global returns in pound terms for UK-based investors. Its ticker is VWRL and it was launched in May 2012.


My portfolio was very different in 2010. Back then I was mostly a share investor. I still held a few investment trusts but not as many as I did in the 1990s.

It was my performances in 2011 and 2013, plus the arrival of small children, that led me to decide to focus on investment trusts once again.




As well as being too time consuming, I felt that I was taking too much risk with my investments. A younger me wouldn’t have minded that so much, but the older me has become much more interested in keeping what I’ve already got!

Assessing my performance

The shifting nature of my portfolio over the years makes judging its success fairly subjective when it comes to choosing exactly what to compare it against.

I’ve decided that I need to compare my performance to a global index as well as a UK one, given the current make-up of my investments.

I’d say 2014 was probably the first year my portfolio became ‘mostly global’ and started to resemble the way it looks today. Taking that as a starting point, I am up 65% for my main portfolio which compares to 22% for the UK market and 60% for world markets (as represented by the Vanguard All-World ETF).

My pension is up 49% since 2014, but it was mostly UK-focused up until early 2016, half-global for a couple of years and then wholly global from early 2018.

If I add in 2013, which was a stinker for me, then my main portfolio is still ahead of the UK market — 58% vs 48% — but it substantially trails the global market’s 94%. My pension returned 84% over the last six years.

Looking ahead, if I can beat global stock market returns by a total of, say, 10% over rolling five-year periods then I would be more than happy. That would represent an annual outperformance of 2%.

Winners and losers in 2018

A number of my holdings helped my overall return this year – Fundsmith and Lindsell Train have both done well, as has Caledonia. The likes of Baronsmead and the infrastructure funds have also helped to steady the ship.

UK small-caps have been the main weak spot, but I’m still building this aspect of my portfolio up. I’m viewing it as an opportunity rather than a weakness that needs to be addressed.

There’s value out there…

I’m not one for making stock market forecasts, given they are utterly futile. That said, after the falls of recent months, valuations do seem to be fairly attractive.

The Bloomberg website has estimates for each main market index and currently shows the following:

  • FTSE 100 – 11.9
  • S&P 500 – 15.4
  • NASDAQ – 19.8
  • Euro Stoxx 50 – 12.7
  • Nikkei 225 – 14.5

Of course, events might get in the way, and the profits behind these estimates might not come to pass.

The UK’s low rating does look pretty tempting – I’ve added City of London Investment Trust to my list of top-up candidates for dividend reinvestments.

Certainly, on a multi-year view, there seems to be a decent chance of equities making respectable progress from here.

Thanks for reading!

Thank you to everyone who has read this blog since I began some six months ago. It’s been a very useful exercise to write down my thoughts and see how they look in the cold light of day. I just wish I had started doing it sooner.

May 2019 be prosperous for you in every single way!

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